Timing is everything: Controlling the timing of third party discovery

In the first four articles of this six-part series on third party discovery, we looked at how courts in various jurisdictions have defined “control” when deciding if a corporation must preserve and/or produce documents of a third party. Last time, we shifted gears a bit to discuss timing of third party discovery, specifically, whether it is possible to seek information from third parties before party discovery is complete. In this article, we provide some practice pointers on timing.

One practical lesson from the cases we discussed in the last article is that a party who anticipates the need for third party discovery and wants it before party discovery is largely completed should begin to pursue that strategy early on. The first and most obvious step is to get the adversary’s document retention/destruction policy or policies. This request has become boilerplate in most discovery demands. Surprisingly, few practitioners actually scrutinize the policies they obtain other than to catch the responding party in non-compliance. In fact, these policies contain a wealth of information that can lead to fruitful avenues of discovery from third parties and more efficient discovery overall. For example, if the practitioner can show that the adversary’s files are unlikely to contain certain materials in light of its retention policy, but a third party’s files might in fact contain that information because the policies are different, a court may be more receptive to letting the third party discovery proceed concurrently. But, what can you do if you have been unable to obtain the third party’s retention policies? Indeed, this was the problem in Arista Records, which we discussed last time.

Depending on the judge, courts are much more open these days to encouraging cooperation on such matters to resolve these issues early in the case in the interest of efficiency. In fact, a Sedona Conference Cooperation Proclamation endorsed by dozens of judges around the country notes that “[l]awyers have twin duties of loyalty: While they are retained to be zealous advocates for their clients, they bear a professional obligation to conduct discovery in a diligent and candid manner.” Judges increasingly demand that counsel cooperate with their adversaries to achieve this diligence.

Thus, if your adversary’s retention policies suggest there might be relevant informational gaps that could be filled by a third party — as in the YouTube case discussed last time — it may be possible to obtain the third party’s policies early in the case in the interests of efficiency. Likewise, if the producing party represents that certain categories of documents are unlikely to be found in its files, this creates an opportunity to look to third parties before all party discovery is completed.

For the party seeking to prevent third party discovery, the cases we highlighted are equally instructive. As corporate counsel, you are aware of your own policies, and you should discuss them candidly with outside counsel. The Rules arguably obligate counsel to be familiar with its own client’s retention/destruction policies, which is an opportunity to study them. In some jurisdictions there are specific rules requiring attorneys to have familiarity with their clients’ internal information management procedures or other applicable guideline which would seem to strongly encourage such familiarity. The U.S. District Court for the District of Kansas writes, “In anticipating of litigation, counsel should become knowledgeable about their client’s information management systems and its operation, including how information is stored and retrieved.” Meanwhile, the Southern District of New York issued an order on electronic discovery requiring that counsel certify their knowledge of their clients’ technological systems.

Further, despite the instinct to limit discovery and thus the burden, counsel should by chary of admitting the corporation’s files are unlikely to or do not have certain categories of documents lest that admission be used as a basis for arguing that immediate discovery from third parties is needed. Instead, assuming there is a reasonable possibility that the universe of documents can be compiled without bothering third parties, lawyers should make that clear to the court.

In sum, with the increased emphasis on transparency and cooperation, counsel are forced to approach discovery with a defined strategy more than ever before. Third party discovery can and should be equally strategic. As is so often the case, a little early planning can be critical in achieving your goals, whether that goal is seeking to promote or attempting to avoid extensive third party practice.